[EDITORIALS]How will we pay for all this?Issues that will greatly affect Korea’s future, including the U.S. troop reduction and the moving of the administrative capital, are coming to a head simultaneously. These projects will not be cheap. Can we handle the burden? We believe it is time to examine our financial status and establish a plan to fund the tasks.
Korea’s financial outlook does not inspire optimism. Due to cuts in corporate taxes, revenue is expected to fall 2 trillion won ($1.72 billion) annually from next year. The economy is unlikely to grow at past rates, and there is a limit to raising the tax burden of the Korean people.
But the planned expenditures are enormous. Some 119 trillion won will go to aiding farmers over the next 10 years as a result of opening the agricultural market, and another 2 trillion won per year will be put into paying back public funds spent on restructuring over the next 20 years. Expenditures in social welfare, including health insurance and aid to senior citizens, are also expected to rise. Money is tight, but the government has many areas to which it must dedicate revenue. This is why many overseas experts worry about Korea’s financial future.
And this is not the end. Projects requiring astronomic amounts of capital are continuously coming up. The cost of moving U.S. troops from Yongsan Garrison alone is expected to exceed 4 trillion won. Currently, it is unclear how much it will cost to move the capital and make the defense improvements needed because of the U.S. troop reduction.
Where will all the money come from? It is questionable whether President Roh Moo-hyun’s administration has carefully reviewed the nation’s revenue and expenditures. After the economic crisis of the late ’90s, Korea’s financial status is not in good shape, as national debt totaled 165.7 trillion won last year.
If the country continues to push for projects without plans to fund them, it will become difficult to invest in improving Korea’s competitiveness, and we might even have to extend our hand for loans. It will mean a hopeless future. System renewal is certainly positive, but what’s more important is reducing spending. The government must cut down on unnecessary, politically motivated projects. The administration must refrain from burdening our descendants and the nation’s future.